City reaps rewards from high-end hotels
Despite a chilly reception from some lodging establishments about summer occupancy, South Lake Tahoe’s motel room tax revenue went up in June and July.
Clearly some hotels fared better than others.
The city collected $1.4 million in taxes in July — an increase of $200,000 over the prior year. June was also up by about $100,000 to $857,298. Hotel guests pay taxes amounting to 10 percent plus $1 at standard properties, with units in the redevelopment zone paying 12 percent.
City and lodging representatives point to four factors as reasons for the escalating numbers — the Park Avenue redevelopment project, aggressive collection efforts by the city finance staff, a significant hike on room rates for the summer, and Measure Z money coming in. The general fund boosting initiative, which passed last November, adds $1 to taxes collected per night, per room.
Over half the hike in TOT collected in July consisted of that extra dollar collected on each room.
“Measure Z saved us,” said Bruce Budman, city finance director.
Campground by the Lake, with added electrical hookups this year, saw an increase of $165 for the month of July in tax revenue. And the city finance department’s diligence at collecting on delinquent accounts panned out. It took in $7,000 in July, in comparison to zero for the same month in 2002.
Redevelopment properties such as the two Marriott time shares fared better this year than the standard motels, which are traditionally smaller in size. Those have experienced a downward slide in bookings.
And despite better revenues overall, the number of rooms rented for July were down considerably compared to 2002. About 10,000 fewer rooms were rented in the city, with the price of those going up on average from $85.70 last year to $101.63.
“I think the Marriott made the difference (in revenues). The higher end hotels were staying busier. The smaller motels were hurting more this summer,” said Pradip Patel, who operates the Super 8 hotel on Highway 50. “(Fewer) people may be traveling. But people who pay $200 a night are not going to flinch.”
Patel, who serves on the South Lake Tahoe Lodging Association board, said his hotel’s revenues were down by 15 percent this summer, but he admitted “it could be worse.”
Nevada casino management may be saying the same thing. The casinos show occupancy in July at 90.8 percent. Last year, it was 91 percent. June numbers were almost equal from year to year.
-Susan Wood can be reached at 530-542-8009 or via e-mail at email@example.com